RAC Projects AI’s Post

Finance tip: Short sell every company doing what Klarna is doing... If you missed it, a few weeks back Klarna's CEO announced they're replacing Salesforce and Workday (among others) with their own AI-powered tools. While it sounds forward thinking on paper, here's 3 big challenges Klarna (and anyone else following suit) is going to face if they follow through: 1. Engineering mission drift Instead of aligning your entire engineering around a shared mission, you're now going to have a group of engineers focused on revolutionizing the payments space, and another group focused on building copycat tools. This isn't just a morale killer; it's a talent retention nightmare. Also, you've now just created a class system within your engineering org. Are you one of the privileged teams that gets to work on the core payments mission, or are you and your team stuck trying to re-build Salesforce. 2. Ongoing support and maintenance When you build it yourself, you own every bug, update, and issue. There's no vendor to call at 2AM when things crash. What happens when the payroll system glitches at month-end or the CRM goes down during quarter-end? You now need to hire folks specifically to support these systems. Also, let's not forget about regulatory compliance. Building GDPR-compliant tools from scratch isn't just hard; it's a constantly moving target with million-dollar consequences for mistakes and slip ups. 3. Lack of subject matter expertise Salesforce and Workday aren't startups. These companies have spent decades refining their products, guided by input from thousands of clients. They have teams of experts who think about CRM or HR all day, every day. Can Klarna really replicate that depth of expertise in-house? Doubt it. Also, these systems aren't static. They evolve with changing business needs, regulatory requirements, and technological advancements. Is Klarna prepared to keep up with all that while staying competitive in their core? Look, I'm obviously very biased here as someone that runs a SaaS business, but this seems like a way better marketing decision than a business one... Agree? Disagree? What am I missing? #ai #saas #crm #salesforce #workday #fintech #enterprise #software

Klarna has laid off hundreds. Now, it’s cutting contracts with Salesforce and Workday and replacing them with internal tools. Its CEO is urging governments to prepare for upcoming job losses—all because of AI. I wanted to talk about this. I think it’s relevant for three main reasons, which I'll cover in the video: 1.) The impact on individual job loss. The CEO of Klarna was quoted as saying, "I think politicians already today should consider whether there are other alternatives of how they could support people that may be effective." He said it was "too simplistic" to say new jobs would be created in the future. "I mean, maybe you can become an influencer, but it's hard to do so if you are 55 years old," he said. This is an important idea to reflect on given that he is one of the people driving much of this change. 2.) How it's affecting entrepreneurs looking to sell software to companies. It's been assumed that SaaS is the right way to build a company. That's based on the premise that companies will find implementing software licenses more cost-effective and straightforward. I think that will stay the same for early-stage companies. For later-stage companies, the cost that you incur to use these larger platforms is steep. My friend's business is doing >$10m a year, and their CRM spend is ~10% of that. That's insane. It will be interesting to see if companies need to switch their business model as this trend continues. 3.) How internal IT/engineering teams should consider building internal tools vs. buying external ones. More of the same as above. It will be necessary for IT buyers to double-check how much it would cost to build the thing they want to buy vs. renting through software licenses. Again, it's been assumed that it is likely cheaper to buy software vs build it. That may be shifting now with AI. We're seeing this tailwind (a bit) with our work with clients through Casper Studios. This video is longer, about 6 minutes. I’m experimenting to see if you prefer this longer content to my shorter-form writing or videos. Over time, this might need to live on YouTube. Let me know what you think. Gokul Rajaram, thank you for your tweet on this topic, which inspired me to research it further.

If it seems too good to be true, then... it's probably AI again! It's interesting how just before their IPO, Klarna are trying to use AI to effect substantial cost savings through layoffs, at at a scale that few companies dare to at the moment. They even implemented their own home-baked systems generated with AI instead of known Sox-compliant enterprise software. Seems legit! To declare this a successful revolution, one needs to confirm this with lagging KPIs such as customer satisfaction, reliability/defects, ability of cut departments to keep up with the company strategy etc. Until we have them, we can't know if the cuts are incredibly brilliant or incredibly crippling. Conveniently enough (for Karna) it might take a few months before the impacts are visible. Of course pre-IPO they would put as positive a story out there as possible. And if they misrepresent the impact - is that called fraud? At the very least this is highly speculative when we know how today's AI is not capable of taking human-level decisions. It's also not capable of being reliable and non-toxic in customer-facing roles. I'm sure investors know all about this, right? They probably have some Tesla stock too. Would Klarna be better than OpenAI and Meta at solving these problems? Or better at pretending? Will it matter if they can parlay AI hype into a high valuation? The high-tech illusion strikes again!

"Klarna shut down Salesforce & Workday and replaced them with a simpler tech stack created by Al" Linas Beliūnas 👍 It’s hard to gauge how accurate this is, as I couldn’t trace it to any official announcement or an undisputable first-hand source. However, the story aligns with Klarna’s recent announcements regarding their use of AI for customer service and marketing. If true, the implications are significant: 👇 🍭 - #Klarna is paving its way to an IPO on a sound AI business transformation narrative more than its main #BNPL business. ☁ - If they can pull this off, the SaaS industry could be severely impacted, signalling the dawn of a new era for enterprise applications. 🤔 - Big consultancy companies should also take notice. I see potential upsides, but also significant threats. This situation bears some resemblance to 2006 #Amazon with #AWS, where a massive new business was born out of their main retail operations 🥑

Back in 2018 when I was consulting a client in London I realized they were asking me to design them a new CRM for their educational business. The reality was that their business did not need a new personalized CRM but an off the shelf one and a new organization of their processes and operations with levels of service that allow their customer success managers to deliver value in different ways. Now, fast forward to 2024 we look at businesses that use SaaS the wrong way ( as too much of their business model relies on that) and too little is captured internal knowledge while we opt for personalized CRM’s focused around their processes. Great stuff, but I wonder when will we stop thinking that the future of businesses in the new era is changing the outsourcing partner from a remote team in a cheap country to a fully automated system using AI. When are we really going to look beyond the scratched surface and take into account the content of our businesses and how we engage more humanely with our customers. In times with an increasing demand for AI to disconnect the humans in the business from the customers, the experience we are selling to customers increasingly lacks humanity making it harder to sell the products/ services with this huge gap in connection between people. I would really want to see how we can design AI for helping more humans connect to other humans to exchange value. In IKEA we work on AI of all sorts, but the most important aspect about working with it is to keep as much as possible the connection with our customers in a humane way. There’s no point in designing chatbots to take over the entire Customer service department if your customer support system is mainly about addressing emotional needs of people going through the experience that may not be able to be solved in any other way. We look at the entire journey of customers and their expectations around support for different issues along this journey and we plan the moments of interaction accordingly knowing the emotional needs at every step. AI is not a one size fits all and should not replace humans but repurpose them. I feel more service design is needed for such new technologies to overcome the gaps that they create once deployed in a one size fits all manner. #businesstransformation #AIrevolution #servicedesign #digitaltransformation #changemanagement

I’ve written about Klarna before—how they’ve consistently pushed the bounds in fintech. But this? This is something that EVERYONE should be paying attention to. Klarna has just replaced Salesforce and Workday with an AI-driven tech stack and slashed its workforce by nearly 50%. If that doesn’t make you sit up and ask some serious questions about the future of work, I don’t know what will. This global fintech giant, are proving that you can run the majority of your operations, from customer service to enterprise systems, using AI tools. The fact that they’re getting rid of systems like Salesforce once considered untouchable in enterprise software and replacing them with cheaper, AI-powered alternatives is a huge shift. And if Klarna is doing this now, how long will it be before the company you work for follows suit? This is where things get serious. If AI can perform the majority of tasks we currently rely on people for—and thats what we’re seeing this happen in real-time—where does that leave us? What happens when it’s not just customer service, but marketing, operations, finance, and other departments too? I'm genuinely interested in hearing from people who are thinking deeply about this. What does the future of work look like when AI is doing *most* of the jobs? How do we adapt? What are the opportunities? What are the risks? We can’t ignore this or pretend that it’s a far-off future—it’s happening now, and the pace of change is only accelerating. So, where are we going with this? Please, share your thoughts. #ai #future #fintech

Klarna CEO's recent shift to downsizing workforce by 50% and departing from service providers like Salesforce is nuts. In the timescale that genAI has been in market, it is very exciting to see how transformative these applications have been in workflows like customer support, software engineering, and legal. But having been working on designing, building, and deploying AI in production -- it's not as easy as it sounds. Some challenges that come to mind: 1. Generative AI doesn't replace the need for software to solving real world problems. It turns out that great software still requires thoughtful craftsman ship and building for users. AI can absolutely accelerate our process when building and provide unique product experiences, but you can't prompt your way through building quality software or solving tricky real-world problems.=. 2. Vertical SaaS is typically built to be very opinionated and catered to specific industries, users, and workflows. I've definitely met founders who have decided to not use Salesforce or Hubspot and just run everything off of Airtable (ie. lower cost, highly customizable, highly integrated). But the base primitives of these tools are configurable databases with good UI, alerts, integrations, reporting, etc. Choosing to build a tool internally still requires a ton of process mapping + reliance on modular services to handle these key components. 3. Once you choose to in-house a process or tool, how do you maintain and improve it? Are folks within existing functions like operations, customer success, support, or finance prepared to configure these tools or leverage no-code patterns? In the case of Klarna, their roadmap to shift 2/3 of all support volume to AI agents was predicated on tons of process mapping + fixing broken SOPs. Its still hard to find candidates that have deep experience in their functional area who can also map + implement a new process using AI. This doesn't mean this can't be done but it represents a fundamental shift in the jobs to be done (ie. everyone can be an AI engineer). What I'm most excited about: For a long time software behemoths have compounded enterprise value and increased margins by selling you the entire kitchen sink. It's kind of like when you walk into Costco to pick up toilet paper but you've suddenly find yourself in the checkout line with cart of stuff "you probably use at some point". Companies like Salesforce (and *leading* CLM providers) have used the same tactics and it turns out companies rather buy the things they need, integrate them, and build to support processes unique to their business. Personally, I rather buy a screwdriver that works really well instead of cheap multi-tool. I'm huge fans of companies like Paragon, Loops, and Retool because the enable companies at all sizes to truly own their stack. Very curious to learn more about similar trends as economic and labor market shifts evolve going into 2025.

🚨 Klarna recently announced they’re letting go of Salesforce and Workday, signaling a massive shift toward AI-powered solutions. This is a wake-up call for all SaaS providers: adapt or be left behind. At Midly, we’re already ahead of this curve. Our AI-driven contract solutions are designed with modern workflows in mind, helping sales teams operate with efficiency and precision. No outdated processes, just seamless integration and smarter workflows that meet the demands of today’s fast-paced business environment. Klarna’s move highlights what we’ve been preparing for: the rise of AI-driven workflows that replace legacy SaaS tools. As we gear up for our November launch, we’re committed to staying at the forefront of innovation, providing tools that actually meet the evolving needs of our users. Are you ready to transform the way your sales teams manage contracts? Visit www.midly.ai and subscribe to receive more updates. #Fintech #PaymentSolutions #BuyNowPayLater #Klarna #CustomerExperience #EcommerceInnovation #PaymentFlexibility #DigitalPayments #FintechTrends #TechSolutions

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🚮 Klarna Bins Salesforce and Workday!! Klarna is undergoing a significant transformation, shifting toward AI and cutting reliance on SaaS providers like Salesforce, with Workday set to follow in the coming weeks. The CEO announced that these changes, combined with AI integration, will reduce Klarna's workforce by 60%. The company is already seeing positive outcomes—revenue per employee has surged, and AI is handling tasks previously done by hundreds of employees in areas such as customer service and marketing. But is this shift sustainable? Could short-term gains lead to long-term challenges? We've seen it before... Klarna’s approach reflects the growing trend of businesses leveraging AI not just to cut costs, but also to enhance productivity and operational efficiency. Is this an anomaly, or are we witnessing the future of global business? Could this transformation even risk destroying a company's culture and identity in the process? Link 🔗 : https://lnkd.in/ea99N6Bw #AI #SaaS #Klarna #TechInnovation #Salesforce #Workday